Teva Pharmaceutical Industries (NYSE and TASE: TEVA) today announced that it will issue a press release on its fourth quarter and full year 2018 financial results on Wednesday, February 13, 2019 at 7:00 a.m. ET. Following the release, Teva will conduct a conference call and live webcast on the same day, at 8:00 a.m. ET. A live webcast of the call will also be available on Teva's website at: http://ir.tevapharm.com/.

Teva or Mylan: Which Is the Better Generic Play in January?
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## Debt changes in 2018
In the first nine months of 2018, Teva Pharmaceutical (TEVA) reduced its net debt level by $3.9 billion to $27.6 billion. According to the company’s third-quarter earnings conference call, it deployed the proceeds it received from its issuance of new corporate bonds to repay its term loans as well as part of its bonds.
The company has also been focusing on using its cash flows to reduce its net debt levels. At the end of September 2018, the company had gross debt of below $30 billion and cash worth $1.9 billion.
At the end of September 2018, Mylan (MYL) had a net debt-to-adjusted EBITDA ratio of 3.8x. According to Mylan’s third-quarter earnings conference call, the company is targeting the repayment of $1.2 billion worth of debt by the end of 2019.
## Debt projections
Analysts expect Teva Pharmaceutical’s net debt to be $28.37 billion, $25.06 billion, and $22.47 billion, respectively, at the end of 2018, 2019, and 2020. The company is expected to reduce its net debt levels by 9.97%, 11.66%, and 10.33% YoY (year-over-year), respectively, in 2018, 2019, and 2020.
Analysts expect Mylan’s net debt to be $12.36 billion, $10.66 billion, and $8.27 billion, respectively, at the end of 2018, 2019, and 2020. The company is expected to reduce its net debt levels by 14.34%, 13.78%, and 22.36% YoY, respectively, in 2018, 2019, and 2020.
Analysts expect Teva Pharmaceutical’s net debt-to-adjusted EBITDA ratios to be 5.26x, 4.76x, and 4.14x, respectively, in 2018, 2019, and 2020. They expect Mylan’s net debt-to-adjusted EBITDA ratios to be 3.28x, 2.66x, and 1.95x, respectively, in 2018, 2019, and 2020.
Compared to Teva Pharmaceutical, Mylan not only has a lower absolute level of net debt but is also expected to reduce its debt levels at a much faster pace from 2018 to 2020.
Browse this series on Market Realist:
* Part 1 - What Analysts Are Recommending for Teva Pharmaceutical in January
* Part 2 - What Are Analysts Recommending for Mylan in January?
* Part 3 - Teva or Mylan: Who Has the More Promising Revenue Trajectory?

Teva or Mylan: Which Is the Better Generic Play in January?
(Continued from Prior Part)
## Expense strategy
According to Teva Pharmaceutical’s (TEVA) 37th Annual J.P. Morgan Healthcare Conference transcript, the company reduced its spending base by $1.8 billion in the first nine months of 2018. The company expects to achieve its restructuring program target of a $3.0 billion reduction in its spending base in 2019.
Mylan (MYL) is also focusing on cost optimization by working on integrating its various businesses across the world as well as its acquired businesses to form One Mylan.
## Expense projections
Wall Street analysts expect Teva Pharmaceutical’s SG&A (selling, general, and administrative) expenses as a percentage of its revenues to be 20.99%, 19.65%, and 19.25%, respectively, in 2018, 2019, and 2020. On the other hand, Mylan is expected to report SG&A expenses as a percentage of its revenues of 19.49%, 19.26%, and 18.76%, respectively, in 2018, 2019, and 2020. Both companies are expected to reduce their SG&A-to-revenue percentages from 2018 to 2020. However, Mylan is expected to spend a lower percentage of its revenue on marketing and commercial activities than Teva.
Analysts expect Teva Pharmaceutical’s R&D (research and development) expenses as a percentage of its revenues to be 5.75%, 5.52%, and 5.42%, respectively, in 2018, 2019, and 2020. On the other hand, Mylan is expected to report R&D expenses as a percentage of its revenues of 5.37%, 5.53%, and 5.31%, respectively, in 2018, 2019, and 2020. Both companies are expected to dedicate a similar percentage of their revenues to R&D activities from 2018 to 2020.
In the next article, we’ll compare the shareholder value generated by Teva Pharmaceutical and Mylan in greater detail.
Continue to Next Part
Browse this series on Market Realist:
* Part 1 - What Analysts Are Recommending for Teva Pharmaceutical in January
* Part 2 - What Are Analysts Recommending for Mylan in January?
* Part 3 - Teva or Mylan: Who Has the More Promising Revenue Trajectory?

Teva or Mylan: Which Is the Better Generic Play in January?
(Continued from Prior Part)
## Long-term targets
According to Teva Pharmaceutical’s (TEVA) J.P. Morgan Healthcare Conference investor presentation, it has an operating margin target of 30%, a cash-to-earnings percentage target of more than 80%, and a net debt-to-EBITDA target of below 3x for the next three to five years. The company also plans to achieve a net debt-to-EBITDA ratio of below 4x by the end of 2020.
According to the company’s presentation transcript, it plans to create shareholder value by focusing on reducing its debt levels rather than raising additional equity. It also plans to focus on the ongoing launch of Ajovy and Austedo to drive its future revenue growth. The increased adoption of these products could help partially offset the impact of the challenges arising from its loss of exclusivities for Copaxone, bendamustine, and ProAir HFA.
Mylan (MYL) also has a well-diversified portfolio across a variety of product categories and geographies. In its third-quarter earnings investor presentation, Mylan said that it expected its North American revenue to fall in the mid-teens in terms of percentage. Its Europe and the Rest of World revenues are expected to rise in the high single digits year-over-year.
## Margin projections
Wall Street analysts expect Teva Pharmaceutical’s gross margins to be 50.75%, 50.87%, and 51.10%, respectively, in 2018, 2019, and 2020. On the other hand, analysts expect Mylan to report gross margins of 54.12%, 54.61%, and 54.71%, respectively, in 2018, 2019, and 2020.
Analysts also expect Teva Pharmaceutical’s adjusted net income margins to be 16.04%, 17.14%, and 18.13%, respectively, in 2018, 2019, and 2020. They expect Mylan to report adjusted net income margins of 21.09%, 22.03%, and 22.92%, respectively, in 2018, 2019, and 2020.
Mylan is thus expected to report higher profit margins than Teva Pharmaceutical from 2018 to 2020.
In the next article, we’ll compare the cost structures of Teva Pharmaceutical and Mylan in greater detail.
Continue to Next Part
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* Part 1 - What Analysts Are Recommending for Teva Pharmaceutical in January
* Part 2 - What Are Analysts Recommending for Mylan in January?
* Part 3 - Teva or Mylan: Who Has the More Promising Revenue Trajectory?

Teva or Mylan: Which Is the Better Generic Play in January?
(Continued from Prior Part)
## Earnings guidance
In its third-quarter earnings investor presentation, Teva Pharmaceutical (TEVA) forecast 2018 non-GAAP (generally accepted accounting principles) EPS of $2.80–$2.95, a significant increase at the midpoint from the guidance of $2.55–$2.80 it had provided in August 2018 and the guidance of $2.25–$2.50 it had provided in February 2018.
In its third-quarter earnings investor presentation, Teva Pharmaceutical forecast 2018 non-GAAP EBITDA of $5.2 billion–$5.4 billion, a significant increase at the midpoint from the guidance of $5.0 billion–$5.3 billion it had provided in August 2018 and the guidance of $4.7 billion–$5.0 billion it had provided in February 2018.
In its third-quarter earnings investor presentation, Teva Pharmaceutical forecast 2018 non-GAAP operating income of $4.6 billion–$4.8 billion, a significant increase at the midpoint from the guidance of $4.3 billion–$4.6 billion it had provided in August 2018 and the guidance of $4.0 billion–$4.3 billion it had provided in February 2018.
In its third-quarter earnings investor presentation, Mylan (MYL) forecast adjusted 2018 EPS of $4.55–$4.90.
## Wall Street estimates
Wall Street analysts expect Teva Pharmaceutical’s non-GAAP EPS to be $2.93, $2.83, and $2.95, respectively, in 2018, 2019, and 2020, implying YoY changes of -26.88%, -3.51%, and 4.43%, respectively.
On the other hand, Wall Street analysts expect Mylan’s non-GAAP EPS to be $4.68, $5.11, and $5.49, respectively, in 2018, 2019, and 2020, implying YoY growth rates of 2.63%, 9.16%, and 7.52%, respectively.
Compared to Teva Pharmaceutical, Mylan is expected to report higher non-GAAP EPS in absolute terms in all years from 2018 to 2020. Additionally, unlike Teva Pharmaceutical, Mylan is expected to report a gradual rise in its non-GAAP EPS from 2018 to 2020.
In the next article, we’ll compare the margins of Teva Pharmaceutical and Mylan in greater detail.
Continue to Next Part
Browse this series on Market Realist:
* Part 1 - What Analysts Are Recommending for Teva Pharmaceutical in January
* Part 2 - What Are Analysts Recommending for Mylan in January?
* Part 3 - Teva or Mylan: Who Has the More Promising Revenue Trajectory?

Teva or Mylan: Which Is the Better Generic Play in January?
(Continued from Prior Part)
## Revenue guidance
In its third-quarter earnings investor presentation, Teva Pharmaceutical (TEVA) forecast total 2018 revenue in the range of $18.6 billion–$19.0 billion. This guidance was a slight change from the guidance of $18.5 billion–$19.0 billion it had provided in August 2018 and the guidance of $18.3 billion–$18.8 billion it had provided in February 2018.
According to the investor presentation, the company also expects its North American business, which includes its US Generics, US Speciality, Canada, and Anda businesses, to report revenue of $9.0 billion in 2018. According to the company’s third-quarter conference call, it expects its generic business revenue to stabilize in future quarters due to its strategy of continuing only with profitable business lines and exiting loss-making product categories.
In its third-quarter earnings investor presentation, Mylan (MYL) forecast total 2018 revenue in the range of $11.25 billion–$12.25 billion, almost flat YoY (year-over-year).
## Wall Street estimates
Wall Street analysts expect Teva Pharmaceutical’s revenues to be $18.85 billion, $17.94 billion, and $17.83 billion, respectively, in 2018, 2019, and 2020, implying YoY revenue falls of 15.81%, 4.82%, and 0.58%, respectively.
On the other hand, analysts expect Mylan’s revenues to be $11.49 billion, $11.99 billion, and $12.36 billion, respectively, in 2018, 2019, and 2020, implying YoY revenue rises of -3.55%, 4.18%, and 3.30%, respectively.
Teva Pharmaceutical is expected to report a falling revenue trajectory, while Mylan is expected to report a modest rise in revenue from 2018 to 2020.
In the next article, we’ll compare the earnings growth prospects of Teva Pharmaceutical and Mylan in greater detail.
Continue to Next Part
Browse this series on Market Realist:
* Part 1 - What Analysts Are Recommending for Teva Pharmaceutical in January
* Part 2 - What Are Analysts Recommending for Mylan in January?
* Part 4 - Teva or Mylan: Whose Earnings Are Growing Faster?

Teva or Mylan: Which Is the Better Generic Play in January?
## TEVA’s price movements
Teva Pharmaceutical (TEVA) is a leading global pharmaceutical company with a market cap of $17.21 billion as of January 8. On the day, the company closed at $17.68 on the NYSE, up 0.06% from its previous closing price.
On January 2, Teva Pharmaceutical issued a press release announcing the settlement of an ongoing patent infringement litigation with Amgen (AMGN) related to the latter’s secondary hyperparathyroidism drug, Sensipar.
Based on its closing price on January 8, the company had reported returns of 14.66% in the last week, -12.73% in the last month, and -17.77% in the last quarter. Teva Pharmaceutical had also reported returns of -27.09% in the last half year, -8.01% in the last year, and 14.66% YTD (year-to-date).
Based on its closing price on January 8, the broader healthcare sector represented by the Health Care Select Sector SPDR ETF (XLV) had reported returns of 0.52% in the last week, -6.42% in the last month, and -7.77% in the last quarter. XLV had also reported returns of 0.37% in the last half year, 2.01% in the last year, and 0.52% YTD.
## Analysts’ recommendations and target prices for Teva
The 12-month consensus analyst recommendation for Teva Pharmaceutical as of January 9 is a “hold.” The 12-month consensus target price for the company is $22.71, 28.45% higher than its closing price on January 8. The highest target price estimate for the company is $30, and the lowest target price estimate is $15.
Of the 23 analysts covering Teva Pharmaceutical on January 9, two analysts have rated the company as a “strong buy,” three have rated it as a “buy,” 15 have rated it as a “hold,” and three have rated it as a “sell.”
In the next article, we’ll discuss analysts’ recommendations for Mylan in greater detail.
Continue to Next Part
Browse this series on Market Realist:
* Part 2 - What Are Analysts Recommending for Mylan in January?
* Part 3 - Teva or Mylan: Who Has the More Promising Revenue Trajectory?
* Part 4 - Teva or Mylan: Whose Earnings Are Growing Faster?

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Teva Pharmaceutical Industries (NYSE and TASE: TEVA) today announced that members of management will present at the 37th Annual J.P. Morgan Healthcare Conference on Monday, January 7, 2019 at 09:30AM PST (12:30PM EST). Kåre Schultz, President & CEO of Teva Pharmaceutical Industries Ltd. will give a presentation on Monday, January 7, 2019 at 09:30AM PST. Following the presentation, Michael McClellan, EVP and CFO of Teva will join Mr. Schultz for a Q&A session at 10:00AM PST (01:00PM EST).

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